Dive Brief:
- A Cincinnati-based logistics operator paid more than $56,000 in back wages and liquidated damages after a U.S. Department of Labor investigation found that the company miscalculated workers’ overtime pay, DOL’s Wage and Hour Division announced Nov. 15.
- The agency said Liberty Hill Equity Partners LLC, operator of two Precision Vehicle Holdings locations in Indiana and Michigan, failed to include nondiscretionary bonuses in employees’ regular pay rates. The omissions affected 234 employees, according to DOL.
- DOL said investigators identified the violations after reviewing payroll records and have since expanded their investigation to include 10 additional Liberty Hill Equity Partners-operated locations in Michigan, Ohio and Tennessee.
Dive Insight:
The department’s Fair Labor Standards Act regulations differentiate between discretionary bonuses — which are bonuses not made according to any prior contract, agreement or promise and over which employers have sole discretion to pay out and calculate — and nondiscretionary bonuses, which employees may expect to receive regularly.
Nondiscretionary bonuses must be included in an employee’s regular rate of pay even if the employer has the option not to pay the promised bonus, according to DOL, unless such bonuses are excludable under a separate statutory provision.
Miscalculated overtime payments are “among the most common violations identified in our investigations,” Aaron Loomis, director of the Wage and Hour Division’s Indianapolis district office, said in the agency’s press release. Loomis added that employers may want to consider accessing DOL’s overtime compliance assistance documentation on its website.
The agency offered additional clarification on the overtime calculations under the FLSA earlier this month via a Nov. 8 wage-and-hour opinion letter. In it, DOL clarified that employers may not exclude reimbursement payments made to employees for expenses from their regular rate of pay if those expenses are not actually incurred.